As shopping centre values are hit by the decline in retail and a COVID induced home delivery trend, landlords are desperate to find alternative uses for redundant space, reports Tom Entwistle.
One company backed by Softbank, an international tech focussed venture capital fund, is offering shopping centre owners a possible solution to their problems.
Reef technology claims to transform under-utilised shopping centre space and car parks into fulfilment centres, neighbourhood kitchens, urban farms and e-scooter rental stations.
Challenging times call for creative measures and perhaps there’s nothing much more challenging than revitalising a dead or dying neighbourhood shopping centre. This is one solution that just might work.
Reef was originally a car parks management company trading as ParkJockey, and has since expanded its package into storage and fulfilment for home deliveries, with its own three-wheel Reef branded e-scooters for home deliveries.
Dark kitchens are where local restaurants and new food brands can prepare food for local delivery, and urban farms are there to market locally grown and environmentally-friendly produce.
Alternative uses can be added in the future including stations for e-bikes, electric vehicle (EV) charging points, and e-scooter rentals.
The $700million funded Reef already operates 4,500 locations in the US and Canada and has raised a further $300million from private equity investment specialists Oaktree Capital Management (which recently tried to buy estate agency giant Countrywide) to enable it to acquire strategic property assets.
It has been estimated that in the UK 16,000 shops closed for good last year and approaching a further 1,000 have closed already in 2021. In addition, landlords have been confronted with billions of pounds of lost or deferred rent payments since the start of the pandemic last year.
Glimmer of hope
Reef’s arrival therefore offers at least a glimmer of hope for shopping centre landlords, and an insight into how they can adopt a diversification strategy that has been proven to work.
Reef‘s MD Europe, Barak Zimerman, told The Times newspaper: “The need to adapt and transform retail has never been greater” Our platform will help Capital & Regional “drive its assets recovery as businesses evolve post-pandemic”.
Pic credit: Paul Wilkinson, Flickr.